The federal government is joining a legal fight against CVS Health that accuses its troubled Omnicare business of routinely filling prescriptions that had expired or run out of refills.
The Department of Justice said in federal court papers filed Tuesday that Omnicare’s pharmacies sent drugs to people living in residential facilities based on “stale, invalid prescriptions.” It accused the company of fraudulently billing government-funded programs like Medicaid and Medicare for drugs dispensed without a valid prescription from 2010 to 2018.
The DOJ said the practice put the safety of thousands of patients at risk because people kept taking the same drugs for months — or in some cases, years — without talking to a doctor.
CVS Health spokesman Mike DeAngelis said the claims have no merit and the company plans to “vigorously defend the matter in court.”
“We are confident that Omnicare’s dispensing practices will be found to be consistent with state requirements and industry-accepted practices,” he said.
Omnicare distributes drugs to skilled-nursing and assisted-living facilities across the country. This isn’t its first brush with legal trouble.
In 2016 it agreed to pay more than $28 million to resolve allegations that it accepted kickbacks for pushing an anti-seizure medication on doctors treating nursing home patients.
Two years before that, it agreed to pay more than $124 million to settle lawsuits alleging it gave kickbacks to some facilities so they would keep the company as their drug provider for elderly Medicare and Medicaid recipients.
In the latest case, the DOJ said many of the drugs dispensed by Omnicare without valid prescriptions treated serious, chronic conditions like dementia, depression and heart disease. It said the drugs need to be monitored by doctors, especially when taken with other medications.
“Rather than performing its basic professional obligation as a pharmacy to obtain a new prescription after an old one expired or ran out of refills, Omnicare simply assigned a new number to the old prescription and kept on dispensing,” the complaint stated.
The complaint filed by the U.S. attorney’s office in Manhattan said Omnicare management focused on maximizing the number of prescriptions filled instead of putting in place a compliance and training program to support its pharmacy staff.
The federal government is joining two lawsuits that had been filed under seal in federal court.
CVS Health bought Cincinnati-based Omnicare for more than $10 billion in cash in 2015, and CEO Larry Merlo hailed the deal then as a “substantial growth opportunity.” But it has proven to be a financial headache.
CVS Health said earlier this year that it booked a $2.2 billion charge in the final quarter of 2018 from the Omnicare business, which has been dealing with low occupancy rates in skilled nursing locations and the bankruptcy of a major customer.
CVS Health Corp. runs one of the nation’s largest drugstore chains and processes well over a billion prescriptions every year as a pharmacy benefit manager. Shares of Woonsocket, Rhode Island, company fell $1.05, or 1.4%, to close Monday at $73.35, while broader indexes climbed slightly.